I agree that the government intentionally understates the unemployment rate. And it's not just baby-boomers retiring, either; labor force participation rates are _UP_ in those older age cohorts. It is the young people who are leaving the labor force in discouragement. They are dropping out of a more functional society because they don't think it has any place for them.
But the problem is only partly an overemphasis on the service economy. Services always require a server who _knows_how_to_ perform the service they're paid for. That is, services are inherently knowledge based. And the well-paying service jobs -- like doctor, lawyer, architect, engineer, etc. -- require a high level of mastery. (Continued)